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Institutions, Gender, and Entrepreneurship in Latin America
Abstract
This chapter seeks to explore the institutional effects on the probability of becoming an entrepreneur, for both women and men, among a low-income level population, in the context of Latin American countries. By using institutional economics, it is hypothesized that personal autonomy, membership of an art or music organization, membership of a religious organization, and secondary educational environment have a positive effect on the probability of becoming self-employed, for both female and male. The World Values Survey (at individual level) and the World Development Indicators (at country level) provide the main information to empirically assess the influence of institutions on low-income self-employment. The findings from probit models suggest that personal autonomy, membership of an art or music organization, and secondary educational environment are factors defining the context in which women and men become entrepreneurs. Public strategies regarding gender equality are discussed.
Accepted Manuscript at: https://sebastian-aparicio.com/research.html
Building upon institutional economics, we examine how social progress orientation (SPO) affects inclusive growth through innovative and opportunity entrepreneurship. Hypotheses about civic activism, voluntary spirit, and the inclusion of minorities as proxies of SPO that affect entrepreneurship directly and inclusive growth indirectly have been suggested. Using unbalanced panel data of 132 observations (63 countries) and the three-stage least-squares method (3SLS), we provide empirical evidence that these three measures of SPO significantly affect innovative and opportunity entrepreneurship. Interestingly, our endogenous measures of entrepreneurial activity have served to explain inclusive growth, which is observed through poverty reduction across countries. Public policies should focus on social values oriented to progress in order to stimulate valuable entrepreneurial activity and hence facilitate economic development that also embraces vulnerable communities.
Using the institutional approach, this paper examines the influence of social progress orientation on innovative entrepreneurship from an international perspective. Using a multiple linear regression model with cross-sectional information from the Global Entrepreneurship Monitor, the Indices of Social Development, the World Values Survey, the Hofstede Centre, the United Nations Development Programme and World Development Indicators, we find that social progress orientation dimensions such as voluntary spirit, survival vs. self-expression values and power distance were related to entrepreneurial activity. More specifically, the main findings demonstrate that high voluntary spirit had a positive and statistically significant impact on innovative early-stage entrepreneurial activity (TEA). In addition, necessity-driven TEA is highly discouraged in those societies with high voluntary spirit and self-expression values, whereas larger power distance increased the entrepreneurial activity driven by necessity. Based on these results, this study advances the literature by introducing and analyzing the concept of social progress orientation, by examining the factors that influence innovative entrepreneurial activity in light of an institutional approach. Also, this research could be useful for designing policies to foster entrepreneurial activity in different national and regional environments.
Abstract
Purpose – The study aims to evaluate critically how the elements of human capital theory such as
level of education, area of education, training and prior work experience influence female
entrepreneurship in sub-Saharan Africa, with focus on Ghana. Though it is very critical that the
elements of human capital are known and assessed, there is currently very little known about the
elements of human capital as pertains to female entrepreneurship in Ghana. This situation has called for
a study such as this one.
Design/methodology/approach – A phenomenological paradigm was adopted for the study. This
includes in-depth interview, documentation and observation. Unlike narrative research that reports on
lived experiences of an individual, phenomenological study focuses on describing the lived experiences
of several individuals. It is mainly a descriptive account of shared experiences of those individuals
located near universal lived experience(s).
Findings – Reporting data from a 2014 qualitative in-depth interview of 25 women entrepreneurs in
Accra who work in service delivery, manufacturing and trading, it was revealed that level of education,
business training and knowledge gained during the course of their work were crucial factors for their
success. As a consequence, this study calls for effective policies that will encourage education and
training of women entrepreneurs, especially those with low levels of education, on a sustainable basis.
Research limitations/implications – The study focused on some of the elements of human capital
and women’s entrepreneurship in Ghana. However, there exist other issues that are critical to the
development of female entrepreneurship in the sub-Saharan region that can be explored to provide more
insight on this subject or different context.
Practical implications – The human capital dimensions which were evaluated for this study
included level of education, area of education, business training and experience gained from prior
employment. The outcome is that these elements are crucial for the success of women entrepreneurs in
Ghana, but there is the need for wider research in other global regions on women entrepreneurs and
human capital factors and whether similar variations prevail.
Originality/value – Evidence from the literature reveals that little is known until now to evaluate the
elements of the human capital of female entrepreneurs in Ghana, and this study seeks to bridge this gap.
Results are examined comparing what is pertaining in other international communities, thus avoiding
a merely national viewpoint.
Keywords Gender theory, Ghana, Business performance, Women’s entrepreneurship,
Human capital, Women entrepreneurs, Sub-Sahara Africa
This article explores the activities involved in embedding a small firm in its industrial context. Inductive analysis of longitudinal, case study data collected from a small firm in the creative industries highlights the use of networks and networking as embedding mechanisms. Key emergent themes include the impacts of pre-embeddedness (defined as the sum of all cultural, social and symbolic capital accessible to the founding team prior to business start-up), the vision and network orientation of the founding team and their strategic use of networking. The interplay between these conditions and activities is revealed as important in building legitimacy, which is critical for embedding a firm in its industrial context. This article extends knowledge of embedding beyond the initial phase of new venture creation and highlights the emergent and evolving dynamics behind this process.
This article investigates the influence of informal and formal institutions on the university students' decision of becoming employer entrepreneurs (university students that create a new firm with employees) in the context of Catalonia. A sample of 1207 students from the Universitat Autònoma de Barcelona (UAB) and the Universitat Oberta de Catalunya were surveyed for the period of 2012–2015, and Probit regressions over pooled data were used. The main findings suggest that formal factors (university's lack of incentives to create a new business, entrepreneurial knowledge, training and skills, and entrepreneurship education) are higher correlated with the student employer entrepreneurs than informal institutions (role models, entrepreneur's social image and fear of failure). Despite that the entrepreneur's social image does not seem to have an influence on the entrepreneurial decision of university students, the other variables analysed are statistically significant, correlated with entrepreneurship as a choice. Specifically, entrepreneurship education is the most relevant variable in explaining the decision of university students becoming employer entrepreneurs. The paper contributes with policy discussions in order to extend the current debate about the role of the universities in the entrepreneurial process and also the importance of entrepreneurial universities to the society.
Between 2003 and 2010, Latin America experienced a solid record of economic growth, coupled with a notable reduction in income inequality. The regional Gini coefficient fell from 0.556 to 0.521 and declined in all 15 out of 17 countries in which frequent data are available. However, previous studies have warned about problems in the sustainability of the decline in income inequality and this study presents evidence of stagnation on this front between 2010 and 2013. The results are robust to various measures of income inequality, but differ across the region. While largely attributable to the recovery from the global financial crisis in Mexico and some countries in Central America, the results are also supported by the demonstrated slowdown in inequality reduction in other countries, including Brazil, Ecuador and Bolivia.
We debate the motivation for and effectiveness of public policies to encourage individuals to become entrepreneurs. Reviewing established evidence we find that most Western world policies do not greatly reduce or solve any market failures but instead waste taxpayers’ money, encourage those already intent on becoming entrepreneurs, and mostly generate one-employee businesses with low-growth intentions and a lack of interest in innovating. Most policy initiatives that would have the effect of promoting valuable entrepreneurship would not be recognizable as such, because they would primarily address other market failures: A central-payer health care would remove healthcare-related distortions affecting employment choices; greater STEM education would produce more engineers of which some start valuable new firms; and labor market reform to encourage hiring immigrants in jobs they have been educated for would reduce inefficient allocation of talent to entrepreneurship.
Latin America has been traditionally characterized as a region with high levels of income inequality. Since the early 2000s, however, inequality has started to decline in most countries, basically due to an expansion of the income share of the poorest deciles at the expense of the richest 10%. This paper addresses the question of whether the improvements are driven by long-term secular trends or structural changes which could be expected to continue to generate inequality-reducing effects for years to come; or alternatively, if the changes are driven by short-term variables which could move unexpectedly in the opposite direction and reverse the gains observed so far. From our statistical analysis, we conclude that the improvements are associated with both long- and short-term factors – with the short-term factors recently having greater inequality-reducing changes.
The purpose of this paper is to analyse the factors that influence female entrepreneurship in Spain, using institutional economics as the theoretical framework. The empirical research uses Spanish regional-level panel data (Global Entrepreneurship Monitor and National Statistics Institute of Spain) covering the period 2003–2010. The main findings indicate that informal factors (recognition of entrepreneurial career and female networks) are more relevant for female entrepreneurship than formal factors (education, family context and differential of income level). The research contributes both theoretically (advancing knowledge with respect to environmental factors that affect female entrepreneurship), and practically (for the design of support policies and educational programmes to foster female entrepreneurial activity).
The aim of this article is to propose a new breakdown of the Gini inequality
ratio into three components (within-group inequality, between-group inequality,
and intensity of transvariation between groups to the total inequality
index). The between-group inequality concept computes all the differences in
salaries between men and women. The main contribution is to show this
relationship when dealing with noninteger frequency data appearing on
survey data. This article also proves the relationship between the very intuitive
Gini concentration ratio and the very commonly used Gini index in the
case of discrete distributions with a finite number of observations. The former
refers to the relationship between the cumulative proportion of population
and income, while the latter is the absolute mean difference divided by
twice the arithmetic mean. This article complements the inequality decomposition
literature that has stemmed from Gini’s work. The research is
applied to analyze gender income inequality in a Spanish region using Spanish
Structure of Earnings Survey data from 2010.
Entrepreneurship policy has been criticised for its lack of effectiveness. Some scholars, such as Scott Shane in this journal, have argued that it is ‘bad’ public policy. But this simply begs the question why the legislative process should generate bad policy? To answer this question this study examines the UK’s enterprise policy process in the 2009–2010 period. It suggests that a key factor for the ineffectiveness of policy is how it is formulated. This stage in the policy process is seldom visible to those outside of government departments and has been largely ignored by prior research. The application of institutional theory provides a detailed theoretical understanding of the actors and the process by which enterprise policy is formulated. We find that by opening up the ‘black box’ of enterprise policy formulation, the process is dominated by powerful actors who govern the process with their interests.
A relatively recent domain of academic inquiry, social entrepreneurship (SE) has been regarded as a field that transcends the boundaries of academic disciplines (Dacin et al., 2010; Mair and Marti, 2006; Seelos and Mair, 2005). However, while the basic premise to combine financial and social impact has attracted a lot of goodwill from governments, businesses, NGOs, and educational institutions alike, the development of explanatory constructs is still limited (Grimes and Victor, 2009; Hull, 2010). While social entrepreneurs are socially embedded in their local communities and assumed to show the ability to build and maintain networks in order to be able to perform (Alvord et al., 2004; Dacin et al., 2011; Mair and Marti, 2006; Perrini and Vurro, 2006), there has been a lack of theoretical foundation with respect to the surrounding network dynamics. We will argue that integrating social capital/networks approaches into the literature will enhance the academic and practical impact of our approaches, and further advance the field.
An integrated framework is not available for studying the environmental conditions conducive for entrepreneurship despite their importance for the emergence and growth of enterprises in a country. This paper develops such a framework consisting of five dimensions of entrepreneurial environments and links these dimensions to the core elements of the new venture creation process. Specific emphasis is given to the role of environmental conditions in developing opportunities and in enhancing entrepreneurs' propensity and ability to enterprise. The paper outlines some propositions and research implications of the integrated model and offers initial guidelines for formulating public policies to develop entrepreneurial environments
In this paper, we examine the effects of pro-market institutions on both formal and informal entrepreneurship. While formal entrepreneurship has long been studied in economic literature, informal entrepreneurship has been less frequently discussed. The purpose of this paper, therefore, is not only to examine the impact of pro-market institutions, but also to foster a better understanding of, and introduce a method to measure, informal entrepreneurship. For the purpose of this paper, pro-market institutions are broken into their two main components: economic liberalization and governance levels. The arguments posit that economic liberalization positively impacts both formal and informal entrepreneurship while governance levels have a positive impact on formal entrepreneurship but a negative effect on informal entrepreneurship. Furthermore, governance levels reduce informal entrepreneurship to a greater extent than they increase formal entrepreneurship, resulting in a net reduction in entrepreneurial activity. The analyses of a panel covering 51 countries from 2002–2009 provide robust support for these arguments.
The emergence of social entrepreneurship has been explained at the macro-level (socioeconomic drivers), at the meso-level (concepts such as opportunity), and at the micro-level (motivations and intentions of social entrepreneurs). In this conceptual article, it is argued that the sociology of social networks may contribute to explain how and why social entrepreneurship arises by bridging micro- and macro-levels of analysis. Four different usages of the social network concept in the social entrepreneurship literature are identified: embeddedness of social entrepreneurship, collective social entrepreneurship, networking as a critical skill or activity of social entrepreneurship, and finally networking and the creation of social capital as a goal of social entrepreneurship. Theoretical frameworks explaining the emergence of conventional entrepreneurship with a social network lens are identified. These are evaluated with regard to social entrepreneurship and translated into a set of research proposals to be explored in order to strengthen our understanding of social entrepreneurship emergence.
A social capital perspective is presented in this paper which helps depict the unique challenges faced by women entrepreneurs. The findings suggest that the barriers facing women's entrepreneurship may not be just economic, they are likely to also be societal. It is therefore essential for policy makers to appreciate the interaction among business owners, policy and social structures. This paper seeks to contribute to both theory and practice of the gender-network- finance nexus and its interplay with public policy, which should be of value to several parties. Firstly, it helps women business owners to better understand the challenges they face and most importantly, the source of these. Furthermore, it may help them to understand their own role in enacting these challenges. Secondly, for policy makers, this study provides insight into the interrelationship and implications between social structure and public policy which are crucial in enhancing the effectiveness and efficiency of public policy. Thirdly, the theoretical and methodological framework developed for this study helps lay a foundation for further research in understanding women's entrepreneurship.
This study provides a comparative analysis of 7 cases of social entrepreneurship that have been widely recognized as successful. The article suggests factors associated with successful social entrepreneurship, particularly with social entrepreneurship that leads to significant changes in the social, political, and economic contexts for poor and marginalized groups. It generates propositions about core innovations, leadership and organization, and scaling up in social entrepreneurship that produces societal transformation. The article concludes with a discussion of the implications for social entrepreneurship practice, research, and continued development.
Despite significant research interest in small firm networks, gaps continue to exist in knowledge and understanding about the concept of a network and its relationship with small firms. This article seeks to build upon extant research by discussing some of the findings to emerge from a qualitative study of small firm networks. The findings presented concentrate on the contents found to exist across the social networks in which six small service firms are embedded. Discussion of these reveal the multiplexity of network relationships and emphasize the informal nature of small firm networking processes. In particular, discussion provides some insight into what motivates small firms to engage in networking and identifies areas for future research.
The influence of religion as an important element of national contexts has been largely neglected in international management research, even though all major religions promote particular values that believers express at work. In this article, we apply the country institutional profile (Kostova, 1999) to specify cognitive, normative, and regulative elements of national religious contexts and relate them to individuals' work obligation norms. Using Hierarchical Linear Modeling (HLM) on data from 62,128 individuals in 45 countries, we find support for our hypotheses regarding positive relationships with one cognitive component (importance of God) and one normative component (behavioral aspect of religion). Our hypothesis for the negative relationship between the regulative component (state religion) and work obligation is also supported. We also propose that religious pluralism will weaken the relationships between the cognitive and normative aspects of religion and work obligations. Results provide varying support for the interactive effects of religious pluralism. We discuss theoretical and practical implications of our results and argue for the analytical importance of religion in understanding workplace behaviors.
Purpose
Entrepreneurship is defined as a “life skill”, and the European Union (EU) has recently called on member states to promote the development of entrepreneurial attitudes from primary school right through to university level. The paper aims to investigate which factors influence entrepreneurial thinking and attitudes towards entrepreneurship in vocational and general secondary education in Austria.
Design/methodology/approach
The paper is based on the configuration approach. This approach was adapted as a conceptual model for the origins of entrepreneurial orientation and start‐up inclinations among school pupils. The model consists of four dimensions: person, education context, education process, and environment. A total of 900 Austrian pupils at secondary‐level schools were surveyed with a standardized questionnaire.
Findings
The results show that entrepreneurial orientation as well as inclinations to start up a new business can indeed be influenced considerably, with potential targeted influences at the personality level, in the education process, and in the pupil's immediate and general environment. It is easier to influence entrepreneurial orientation than start‐up inclinations.
Research limitations/implications
Owing to the heterogeneous school systems in Europe it may be difficult to transfer findings from one country to another. Much more research is needed for identifying country‐specific factors of influence.
Practical implications
The results provide evidence that the potential for developing entrepreneurial orientation and promoting the abilities needed for a free and self‐determined career has not been exhausted by any means.
Originality/value
The study shows that the education process can have a considerable influence on entrepreneurial orientation, and that the EU's call for the promotion of entrepreneurial spirit can be fulfilled in the sphere of education.
Purpose
In this paper, a social capital perspective is presented to illustrate the interaction between gender and resource mobilization through business owners' networks.
Design/methodology/approach
This paper explores the resources provided by key supporters of small and young Spanish business owners within the professional service sector.
Findings
The findings suggest that a small group of key individuals provides a diverse range of mainly intangible support to the entrepreneur. Overall, the paper finds only limited support for the idea that male and female networks differ in resource mobilization except for the source of contacts‐referrals and emotional capital. The importance of including emotional capital is evident in the fact that men and women seek it in large numbers, although few studies consider it within the resources provided by the entrepreneurial networks, since it is normally attributed to women and the private sphere.
Research limitations/implications
It seems that women business owners, through their embeddedness in networks, can build a bridge between their agency and the structure which normally implies some constraints for them due to the gender‐belief system. Establishing a mentorship program can prove very useful, since business owners prioritize obtaining intangible resources from their key supporters: ideas‐advice, emotional support, and contacts‐referrals.
Originality/value
Despite the research attention on social capital in recent years, prior work has tended to focus on how actors connect (structural dimension); however, there is a dearth of research about the resources actors can potentially gain access to by examining with whom they connect. Moreover, few studies have recognized the impact of gender on networking experiences.
If “entrepreneurship has become the engine of world economic and social development” (Audretsch, 2003, p.5), culture is becoming more and more a specific context in which is possible to invest and create new opportunities of labor and value. The principal aim of this contribution is to understand how it's possible for cultural organizations to influence the environment and local development. So, the work wants to highlight - through the analysis of an empirical case of success - what might be the indicators able to create virtuous relationships among cultural organizations and social and economic context. The work aims to contribute both theoretically and practically on the topic of cultural entrepreneurship. The results of this research can be utilized for further reflections in order to develop a framework with high practical relevance.
This article examines the relationship between entrepreneurial activity and a set of economic variables including gross domestic product, economic growth, unemployment, informality, corruption perceptions, macroeconomic stability, and labor regulations. We use panel data from nine Latin American countries covered by the Global Entrepreneurship Monitor from 2000 to 2010. We focus on necessity-based entrepreneurship, as the rates of this type of activity are relatively high in Latin America. The results show that economic growth is positively related to opportunity-based entrepreneurship. Other factors such as inflation, informality, and transparency (versus corruption) are positively associated with higher rates of necessity-based entrepreneurship. Lines of future research and policy implications are discussed.
Purpose
– Past research has identified a negative association between national income and female entrepreneurship rates. Data from Global Entrepreneurship Monitor (GEM) 2012 are analyzed to determine whether the Human Development Index (HDI) predicts female entrepreneurship rates. The purpose of this paper is to indicate how other socioeconomic variables that measure human development interact with national income to predict female entrepreneurship rates.
Design/methodology/approach
– Data were drawn from the 2012 GEM data set, which provides information on female entrepreneurship rates in 61 countries. To test relevant hypotheses, dependent and socio-demographic variables were sourced from international databases to perform quantitative cross-country regression analyses.
Findings
– National income significantly predicted female entrepreneurship rates in the univariate analysis. However, this relationship became non-significant when development indices were added to the model. In contrast, the HDI, the Gender Inequality Index, and national religious composition were robust, significant predictors.
Practical implications
– This study presents evidence that human and gender development indices, and national religious composition, are better predictors of female entrepreneurship rates than national income. Thus, studies on female entrepreneurship rates should account and adjust for human development and gender equality indices. As religiosity continues to be pervasive within multiple nations, policymakers should consider this when developing interventions geared toward promoting female entrepreneurship.
Originality/value
– This paper identifies factors other than economic determinism to explain variance in female entrepreneurship rates and demonstrates that human development and gender inequality indices are better predictors of female entrepreneurship rates.
The decline in inequality observed in most Latin American countries after 2002 was surprisingly good news, particularly given that most developed countries were experiencing a rise in inequality at that time. Various arguments have been put forward to explain this decline, but there is still no consensus on the most plausible explanation. This article contributes to the ongoing discussion by performing inequality decompositions by factor components. We estimate the importance of each source of income in explaining the observed decline in income inequality between 2002 and 2011 in five Latin American countries. Specifically, we explore the role of the process of formalization that has taken place in regional labor markets, separating formal and informal wages and considering self-employment incomes. In the five countries studied here informal wages and self-employment income contributed to decreasing inequality. Formal sector wages, on the other hand, fostered inequality in all countries except Bolivia. © 2016 International Association for Research in Income and Wealth.
Since the advent of public and private initiatives in Colombia, there has been interest in exploring the possible future pathways of the Colombian business cycle. Based on a foresight analysis, it has been identified on the one hand that it is necessary to achieve greater productivity and competitiveness and on the other hand, collective intentionality towards progress must be encouraged. Using these analyses, new Colombian scenarios are discussed, taking into account intentionality towards entrepreneurship and innovation. Following the entrepreneurship research, it is suggested that innovative entrepreneurial activity is linked to long-term economic growth. Thus, the purpose of this paper is to identify the role of innovative entrepreneurship in Colombian business cycle scenarios using system dynamics (SD) modelling. Here, we approach futures studies, testing dynamic hypotheses concerning development based on societal and socioeconomic integration, in which innovative entrepreneurship is highly relevant. The model, supported by circular flow analysis and Schumpeterian theory, shows how this type of entrepreneurship contributes to sustainable economic growth during the simulation period (2003–2032). To achieve a 6.77% average growth rate (the higher scenario), policies regarding knowledge transfer from specialized foreign individuals, incumbent firms and universities, as well as incentives for entrepreneurial societies and collectivism, are discussed.
This study provides new evidences on the way men and women process the information in venture creation decision (VCD) and the differences that may arise when taking this decision. To reach this objective, this study carries out an experiment and identifies 120,536 people from twenty-five countries with different levels of development. The main finding indicates that although men and women process information differently, new generations of women begin to process information like men do, which might indicate that efforts in gender equality policies may be working but are not yet sufficient.
This well-written book is the first to deal with entrepreneurship in all its aspects. It considers the economic, psychological, political, legal and cultural dimensions of entrepreneurship from a market-process perspective. David A Harper has produced a volume that analyses why some people are quicker than others in discovering profit opportunities. Importantly, the book also covers the issue of how cultural value systems orient entrepreneurial vision and, in contrast to conventional wisdom, the book argues that individualist cultural values are not categorically superior to group oriented values in terms of their consequences for entrepreneurial discovery.
The article provides a historic perspective and an overview of policy and practice affecting entrepreneurship education today with a special focus on the recent development in Sweden.
When entrepreneurship policy is being implemented in the Swedish educational system, the main effect on entrepreneurship education seems to be growth in an alternative view on entrepreneurship as foremost a means for accomplishing learning through action and practice. The implementation tends to favour the entrepreneurial learning concept over the entrepreneurship concept; where entrepreneurial learning encompasses a multitude of educational practices for developing internal entrepreneurship and enterprising abilities. External entrepreneurship for business venturing is not given priority. The thought tradition withheld in Business schools thus has had little influence on the implementation in Swedish primary and secondary school. Instead, new ideas on entrepreneurship are created outside the business context through experimentation in school teaching practices, where one also can spot an emerging research interest from pedagogy
This paper explores the institutional factors that encourage opportunity entrepreneurship in order to achieve higher rates of economic growth. We suggest that institutions may not have an automatic effect, as is typically assumed in growth models. Rather, a mechanism is required to serve as a conduit into the society for those institutional factors that affect productive behavior such as entrepreneurial activity. Thus, opportunity entrepreneurship is identified as one such mechanism that impacts on economic growth. Using a three-stage least-square method through unbalanced panel data with 43 countries (2004–2012), we find that informal institutions have a higher impact on opportunity entrepreneurship than formal institutions. Variables such as control of corruption, confidence in one's skills and private coverage to obtain credit promote a positive effect of opportunity entrepreneurship on economic growth in all the countries of our sample, and especially in Latin American countries as a homogeneous group. These results suggest additional elements to the theoretical discussion in terms of the importance of institutions as framework to understand determinants and effects of opportunity entrepreneurship. Regarding policy implications, the results also suggest that it could be possible to obtain economic growth encouraging the appropriate institutions in order to increase the entrepreneurship by opportunity.
Online access:
http://www.sciencedirect.com/science/article/pii/S0040162515000992
This paper estimates the effect of education on the success of entrepreneurial activity, using survey data from Malawi. An instrument variable approach is used to address the endogeneity of education. We find a significant and substantial effect of an added year of primary education on entrepreneurial profitability. This is consistent with theoretical arguments that primary schooling provides a generalised form of competence that underpins the variety of skills an entrepreneur needs to succeed in business. Results are robust to non-random selection into entrepreneurship.
The interesting relationship between entrepreneurial activity and regional competitiveness has been a major focus of academics, university managers, and policy makers during the past decades—in particular the role of institutions in the establishment of political, social, and economic rules-. For example, since the enactment of the US Bayh–Dole Act more than 30 years ago, many American cities and regions are increasingly viewing universities as potential engines of economic growth. In these new socioeconomic scenarios, the role of entrepreneurial universities is not only generates/transfers knowledge but also contributes/provides leadership for the creation of entrepreneurial thinking, actions, and institutions. Previous studies have shown the university’s role in economic development, but no empirical study has analyzed the entrepreneurial activity generated by university students per university at the country/regional level of analysis. The purpose of this paper is to explore the impact of the university’s entrepreneurial activity on regional competitiveness. Adopting the institutional economics and the endogenous growth approaches, a proposed conceptual framework was developed and tested with structural equation modeling using data from 102 universities located in 56 NUTS II of 12 European countries. Our results evidenced that informal factors (e.g., attitudes, role models) have a higher influence on university entrepreneurial activity than formal factors (e.g., support measures, education and training). Our results also evidenced a higher contribution of universities on regional competitiveness, in particular, when we used social measures (talent human capital) instead economic measures (GDP per capita).
The dire economic situation in Mexico, with its high rate of unemployment, makes it necessary for many women to find some form of economic activity to provide income for their families. Although such conditions could encourage the creation of new firms, the results of the Global Entrepreneurship Monitor 2006 Report show a gap between the number of women involved in nascent and young entrepreneurship initiatives and the number who owns established firms. This gap may indicate that the firms created need to improve their competitiveness and their ability to survive.
In developing countries, informal firms account for up to half of economic activity. They provide livelihood for billions of people. Yet their role in economic development remains controversial with some viewing informality as pent-up potential and others viewing informality as a parasitic organizational form that hinders economic growth. In this paper, we assess these perspectives. We argue that the evidence is most consistent with dual models, in which informality arises out of poverty and the informal and formal sectors are very different. It seems that informal firms have low productivity and produce low-quality products; and, consequently, they do not pose a threat to the formal firms. Economic growth comes from the formal sector, that is, from firms run by educated entrepreneurs and exhibiting much higher levels of productivity. The expansion of the formal sector leads to the decline of the informal sector in relative and eventually absolute terms. A few informal firms convert to formality, but more generally they disappear because they cannot compete with the much more-productive formal firms.
Most studies that incorporate a gender dimension into the study of poverty or other development outcomes focus on the sex of the household head. This paper argues that a headship analysis gives only a partial view of gender inequality since it does not take into account the position of women within male-headed households. Drawing on the recent Living Standard Measurement Studies for Latin America and the Caribbean, the authors present baseline indicators of the degree of gender inequality in asset ownership for the eleven countries in the region that have collected individual-level data on asset ownership. Disaggregated data on asset ownership within households suggests that the distribution of property by gender is more equitable than a headship analysis alone would imply. But the degree of gender inequality also varies according to the specific asset and among countries. Further comparative work on asset ownership requires attention to the marital regimes governing property rights in marriage. Finally, the authors suggest how household surveys could be improved by standardizing the collection of individual-level data across countries.
This paper has three overarching objectives. The first is to document the development of the body of work known as women's entrepreneurship research. The second is to assess the contributions of this work, specifically vis-à-vis the broader entrepreneurship literature. The third is to discuss how this broader literature poses challenges (both difficulties as well as opportunities) for scholarship on female entrepreneurs. We approach these objectives from the standpoint of informed pluralism, seeking to explore whether and how women's entrepreneurship research offers extensions to—and can be extended by—general research on entrepreneurs and their ventures.
This study examines how institutional conditions provide assurances founders seek when creating businesses. Classical theories predict legal institutions promote supportive conditions that foster business creation. We develop an alternative theory for why this relationship is not as straightforward in emerging economies. In these regions, people may be discouraged from taking entrepreneurial action because of the difficulties in accessing legal protections efficiently. We also introduce theory regarding the moderating role of generalized social trust because of its normative influences on business creation. We argue that generalized trust in strangers exerts positive moderating effects on the direct relationship between legal protections and entrepreneurship. The findings from our multilevel analysis of 30 emerging economies are consistent with our theory. Our work advances a new framework for how entrepreneurs cope with uncertain business conditions in emerging economies where informal, normative social structures offer more privately oriented safeguards than do formal, publicly oriented institutions. Our study also reconnects macro-institutional theories with individual-level accounts of entrepreneurship.
In this landmark work, a Nobel Prize-winning economist develops a new way of understanding the process by which economies change. Douglass North inspired a revolution in economic history a generation ago by demonstrating that economic performance is determined largely by the kind and quality of institutions that support markets. As he showed in two now classic books that inspired the New Institutional Economics (today a subfield of economics), property rights and transaction costs are fundamental determinants. Here, North explains how different societies arrive at the institutional infrastructure that greatly determines their economic trajectories. North argues that economic change depends largely on "adaptive efficiency," a society's effectiveness in creating institutions that are productive, stable, fair, and broadly accepted--and, importantly, flexible enough to be changed or replaced in response to political and economic feedback. While adhering to his earlier definition of institutions as the formal and informal rules that constrain human economic behavior, he extends his analysis to explore the deeper determinants of how these rules evolve and how economies change. Drawing on recent work by psychologists, he identifies intentionality as the crucial variable and proceeds to demonstrate how intentionality emerges as the product of social learning and how it then shapes the economy's institutional foundations and thus its capacity to adapt to changing circumstances. Understanding the Process of Economic Changeaccounts not only for past institutional change but also for the diverse performance of present-day economies. This major work is therefore also an essential guide to improving the performance of developing countries.
While considerable concern has emerged about the links between religion and economic growth, little is actually known about how religion and social class impact the decision making of individuals. Using institutional theory and social dominance theory, this paper examines the influence of religion and social class on individuals' occupational choices. Based on a large-scale database from India, this paper finds that while some religions are relatively conducive to self-employment, some others have a negative impact on self-employment choices. Furthermore, individuals belonging to social classes that are lower in the social hierarchy are less likely to be self-employed. The role of both religion and social class in influencing the likelihood of choosing self-employment suggests an important link between religion, social class, and occupational decision-making.
Individuals living in poverty remain a critical issue. This special issue focuses on how entrepreneurship can help to solve such poverty. Rather than viewing those in poverty as a market for goods, the solution lies in understanding how to help those living in poverty create their own businesses. Ultimately, entrepreneurship among those in poverty will create a long lasting solution to their poverty. Herein, we initially examine the extant knowledge about entrepreneurship. We then examine where future research on this important topic should move. Finally, we introduce the five articles that make up this special issue. These five articles came from the initial 71 submissions and enhance our knowledge about entrepreneurship as a pathway to reducing poverty.
The purpose of this article is to examine the influence of institutional dimensions (regulative, normative and cultural-cognitive) on the probability of becoming an entrepreneur. The main findings demonstrate, through logistic regression, that a favourable regulative dimension (fewer procedures to start a business), normative dimension (higher media attention for new business) and cultural-cognitive dimension (better entrepreneurial skills, less fear of business failure and better knowing of entrepreneurs) increase the probability of being an entrepreneur. Data were obtained from both the Global Entrepreneurship Monitor and the International Institute for Management and Development for the year 2008, considering a sample of 30 countries and 36,525 individuals. The study advances the literature by providing new information on the environmental factors that affect entrepreneurial activity in the light of institutional economics. Also, the research could be useful for designing policies to foster entrepreneurship in different environments.
In this paper we investigate the extent to which gender equality disintegrates women's self-employment choice (compared to that for men) and whether this is contingent upon a country's development stage and industries. We rely on symbolic interactionism to argue that employment choices emerge from an interactive conversation between individual and social institutional processes. Using data from 61 countries, we find that overall gender equality is associated with the gender gap in men's and women's self-employment choices and that this association depends upon the country's development stage and industries. Contributions are made to women's entrepreneurship and institutional theory.
Little is currently known about the effects of skill composition on academic entrepreneurship. Therefore, in this paper, following Lazear’s (J Labor Econ 23(4):649–680, 2005) jack-of-all-trades approach, we study how the composition of a scientist’s skills affects his or her intention to become an entrepreneur. Extending Lazear, we examine how the effect of balanced skills is moderated by a balance in working time and peer effects. Using unique data collected from 480 life sciences researchers in Switzerland and Germany, we provide first evidence that scientists with more diverse and balanced skills are more likely to have higher entrepreneurial intentions, but only if they also balance their working time and are in contact with entrepreneurial peers. Therefore, to encourage the entrepreneurial intentions of life scientists, it must be ensured that scientists are exposed to several types of work experience, have balanced working time allocations across different activities, and work with entrepreneurial peers; e.g., collaborating with colleagues or academic scientists who have started new ventures in the past.
The purpose of this paper is to analyze the main socio-cultural factors that influence women entrepreneurship in Catalonia, using institutional economics as a theoretical framework. The empirical research employs logistic regression models (rare events logit), utilizing data obtained from the Global Entrepreneurship Monitor project (GEM). The main findings highlight that 'fear of failure' and 'perceived capabilities' are the most important socio-cultural factors on the probability of becoming a woman entrepreneur. The research contributes both theoretically, advancing knowledge of the socio-cultural factors that affect female entrepreneurship, and practically, helping in the development of educational programmes and support policies to promote entrepreneurial activity.
The number of women starting and owning their own businesses has grown dramatically over the past decade. Concurrent with this trend, there has been an increase in the number of research studies focusing on or including women business owners in their samples. This paper reviews empirical research studies on women business owners and their ventures, classifies the studies in a framework, and summarizes trends emerging from this research. To guide future research, a new perspective on women-owned businesses is proposed and research questions, methods, and implications are discussed.
This article introduces its subject with a brief overview of some of the contention concerning the creative industries, in terms of their purview, their significance within political economy, and the extent to which, and how, they may differ from other sectors. Arguing that the `motley crew' is a very broad church, and management must not confine itself solely to the management of production but should also consider the role of consumption, the authors suggest that research into the creative industries may be considered in relation to the capitals that inform its domain: intellectual capital (creative ideas), social capital (networks), and cultural capital (recognized authority or expertise). Considering research in these terms allows us to identify a matrix that might provide the basis for conversations between a range of discrete research areas, while also guiding future research into the creative industries.
Examines the role that institutions, defined as the humanly devised constraints that shape human interaction, play in economic performance and how those institutions change and how a model of dynamic institutions explains the differential performance of economies through time. Institutions are separate from organizations, which are assemblages of people directed to strategically operating within institutional constraints. Institutions affect the economy by influencing, together with technology, transaction and production costs. They do this by reducing uncertainty in human interaction, albeit not always efficiently. Entrepreneurs accomplish incremental changes in institutions by perceiving opportunities to do better through altering the institutional framework of political and economic organizations. Importantly, the ability to perceive these opportunities depends on both the completeness of information and the mental constructs used to process that information. Thus, institutions and entrepreneurs stand in a symbiotic relationship where each gives feedback to the other. Neoclassical economics suggests that inefficient institutions ought to be rapidly replaced. This symbiotic relationship helps explain why this theoretical consequence is often not observed: while this relationship allows growth, it also allows inefficient institutions to persist. The author identifies changes in relative prices and prevailing ideas as the source of institutional alterations. Transaction costs, however, may keep relative price changes from being fully exploited. Transaction costs are influenced by institutions and institutional development is accordingly path-dependent. (CAR)
claim that the four-item index developed by Inglehart is invalid because respondents' first and second choices are randomly related and that it fails to predict respondents' positions on theoretically relevant social issues. We maintain that they make unwarranted assumptions about how responses to ipsative items should be related and demonstrate that the value indicators m-e powerful predictors. Clarke et al. argue that the trend toward postmaterialism does not result from long-term generational change but simply reflects declining inflation and rising unemployment over the past quarter-century. We show that period effects, particularly inflation, influence observed values. But after controlling for inflation, there is still a :substantial shift toward postmaterialism. Moreover, rising unemployment partly offsets the effect of falling inflation.